Saarland's SPD and CDU Reach Agreement on Transformationsfonds

The compromise limits credit borrowing, reallocates funds, and aims to support economic transition amid rising unemployment concerns.

The SPD and CDU in Saarland have agreed on a revised Transformationsfonds to facilitate economic transformation and avoid legal disputes.
The fund's credit borrowing limit has been reduced from 2.4 billion to 1.5 billion euros, with an additional 600 million covered by financial transactions.
Saarland will increase its contribution by 200 million euros, using additional tax revenue from the 2022 census.
The fund's duration is shortened to 2027, with a possible extension to 2028, to comply with a constitutional court ruling requiring annual justification of financial need.
Key investments include 800 million euros for the steel industry transition and hydrogen infrastructure, though delays in major projects like Wolfspeed raise unemployment concerns.